Nifty 50 July futures (15,595): Go short now and at 15,630

The Indian benchmark indices are down sharply on the final trading day of the week. Both the Sensex and Nifty 50 are down about 1 per cent each. The Sensex is at 52525 and Nifty at 15620. Though the indices have risen from their intraday lows, the outlook is negative. As such, the upside can be capped, and a further fall is likely in the coming sessions. Nifty can now revisit 15400-15200 on the downside, while the Sensex can fall to 51000 and lower.

The Asians are also trading in the red. Nikkei 225 (25,921), Shanghai Composite (3,392), Hang Seng (21,859) and Kospi (2,299) are all down in the range of 0.18-1.7 per cent.

In the US, the Dow Jones Industrial Average (30.775, down 0.82 per cent) has declined below the key level of 31,000. It can now extend the fall up to 30,000 and even lower in the coming days.

Futures: The Nifty 50 July (15,595) futures is down 0.95 per cent. The contract has jumped up well from the low of 15,513. However, there is strong resistance at 15,640, which can cap the upside. The contract can reverse lower again and fall to 15,400 in the coming sessions.

Traders can go short now and accumulate shorts at 15,630. Stop-loss can be kept at 15,720. Trail the stop-loss down to 15,530 as soon as the contract falls to 15,490. Move the stop-loss further down to 15,480 as soon as the contract touches 14,460. Book profits at 15,430.

The bearish outlook will be negated if the Nifty 50 July futures contract breaks above 15,640. In that case a rise to 15,700 and 15,770 is possible.

Trading strategy: Go short now and at 15,630. Keep the stop-loss at 15,720 for the target of 15,430. Trail the stop-loss down to 15,530 as soon as the contract falls to 15,490. Move the stop-loss further down to 15,480 as soon as the contract touches 14,460.

Supports: 15,500 and 15,400

Resistances: 15,640 and 15,700

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